INDIVIDUAL TAXATION
Non-residents are taxed on their Latvian-sourced income. Married couples are taxed separately.
INCOME TAX
Non-residents earning income in Latvia are taxed at a flat rate of 23%. Non-residents are often taxed by withholding and are only eligible for allowances and credits available to residents if they are residents of EEA countries and are earning at least 75% of their income from Latvian sources. Income-generating expenses may be deducted from taxable income.
As of 01 January 2008, business income is taxed at a reduced rate of 15%. To avail of the reduced tax rate, taxpayers must register their economic activities with the tax authorities.

RENTAL INCOME
Non-resident property owners who register their economic activities with the tax authorities are liable to pay tax on their rental income at a reduced rate of 15% and can deduct depreciation expense when computing for the taxable income.
The annual tax depreciation rate of buildings is allowed up to 10% of the property value.
CAPITAL GAINS
Capital gains from the sale of real estate property, realized by a non-resident, are taxed at the ordinary income tax rate of 23%, if the property was sold to a non-resident or a private person.
PROPERTY TAX
Real Estate Tax
Real estate tax is levied in Latvia. The tax is levied on the cadastral value of the land, at 1.5%. Local authorities are allowed to grant discounts on this tax for certain taxpayers. Real estate tax paid is also deductible for income tax purposes if the real estate property is used for business or commercial purposes.

CORPORATE TAXATION
INCOME TAX
Income and capital gains earned by corporations are taxed at 15%. Income-generating expenses and depreciation expenses are all deductible. The annual tax depreciation rate of buildings is allowed up to 10% of the property value.
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